REG - Tirupati Graphite - Operation and Trading Update

Tirupati GraphiteAnnouncement

19/10/2023 07:00

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RNS Number : 6534Q  Tirupati Graphite PLC  19 October 2023

The information communicated within this announcement is deemed to constitute
inside information as stipulated under the Market Abuse Regulations (EU) No.
596/2014 which is part of UK law by virtue of the European Union (Withdrawal)
Act 2018. Upon the publication of this announcement, this information is
considered to be in the public domain.

 

19 October 2023

 

Tirupati Graphite plc

('Tirupati', 'TG' or the 'Company')

 

                Madagascar Operations progress and key trading
results H1 FY24

 

Tirupati Graphite plc (TGR.L, TGRHF.OTCQX), the specialist flake graphite
company and supplier of the critical mineral for the global energy transition,
is pleased to provide an update on its flake graphite operations and further
outlook as it evolves as a globally significant flake graphite producer:

 

Overview

 

·    H1 FY 2024 performance significantly ahead of the same period in the
prior year with production up 160% and revenues up 170%, prior to significant
further productivity improvements expected in Q3.

·    During the period the Company continued the optimisation of its
facilities including:

o  Successfully addressing the bottlenecks in the mining and processing
activities;

o  c.50kms road kms road network with c.20bridgwes and culverts which enabled
operations sustained through the recent rainy season without any disruptions;
and

o  Extensive training of onsite personnel to improve skillsets and enable
better implementation of the standard operating practices resulting in more
efficient operations.

 

·    As a result, operations at the mine and plant are running
uninterrupted at a consistent rate since the start of Q3 FY24.

 

·    Run rates during Q3 FY24 are averaging:

o  C,1,800 tons per day ore feed representing 75% of rated ore feed capacity;

o  Flake graphite throughput of 40 to 45 tons per day of operations varying
primarily with head grade;

o  Average head grade across the two projects remains below 3% as against
4.5% used for plant design, average recovery remaining >80%

o  Owing to saprolite ore type, which does not allow ideal separation of
inter and over burden in bulk mining operations, the Company considers it
prudent to assume head grade to remain c.3% and reorient its future plans
accordingly;

o  Consistent production rate of c.50% of rated capacity is now achieved in
spite of the head grade remaining significantly lower than the plant design
assumption; and

o  The Company is currently engaged in increasing ore feed rate to rated
capacity on a consistent basis.

 

●     The key outcomes from the Company's operational experience over
the past six months, when no significant development activities were ongoing,
include:

o  The advantages envisaged by the Company in processing plant split
implemented across its two projects have been effective in meeting operations
stabilisation; and

o  The limitation in production can be addressed by installing additional
preconcentrate units, as output from these are susceptible to be impacted by
various factors.

 

●     The Company is considering steps to increase ore feed beyond 2,400
tons per operating day and set up of additional new PCU's across the two
projects to address the limitation of head grade and exploit more of its
overall plant capacity:

o  The Final Concentrate Unit ("FCU") at Sahamamy is designed to produce up
to 2.4 tons flake graphite concentrate per hour (18,000 tpa); and

o The FCU at Vatomina has a current design capacity of 1.6 tons flake graphite
concentrate per hour and can be upgraded to 2.4 tons per hour (18,000
tpa).

 

To meet its needs for these developments and working capital requirements, TG
has initiated engagements to obtain institutional debt finance.

 

Key operating results for H1 FY23 and Further Overview for H2FY24

 

 Particulars                  Unit   H1 FY24      H1 FY23      % Change YoY
 Quantity Sold & Shipped      MT     4,785        1,691        +183%
 Revenue from Sales           £      £3,146,589   £1,165,195   +170%
 Revenue from Sales           $      $3,955,690   $1,441,923   +174%
 Price realised               £/MT   658          689          -4%
 Price realised               $/MT   827          833          -1%
 Quantity Produced            MT     4,508        1,731        +160%

 

●     The price realised remained similar to H1 previous year in spite
of subdued market prices during the current year period.

●     Substantial growth was registered in production, sales and
revenues albeit adversely effected by working capital constraints     .

●     The company continues to engage in alternative sources of finance
to bridge the gap of working capital and for further investments.

●     Upgrading of the overall ore feed capacities to mitigate the
limitations caused due to head grade are targeted to be completed in FY24
subject to financial arrangements availability.

●     In H2 FY 24, the Company estimates base case production of 7,500
tons though working towards reaching 10,000 tons, given the limitations of
head grade.

 

 

Renewable Energy

 

●     The operations of 100 KW hydro power plant have completely
stabilised and meet the power requirement of concentrate finishing section at
the Sahamamy plant while also illuminating homes of the communities around the
project.

●     Studies for an additional 500 KW hydro power plant have been
completed and once installed, would be sufficient to substantially meet the
power requirements of the Sahamamy project.

●     In addition to saving emissions and reducing costs, renewable
energy initiatives provide an edge to the Company with ESG conscious
customers.

●     The Company intends to further the development arranging debt
funding for the same alongside the targets outlined above.

 

Shishir Poddar, Executive Chairman, said:

 

"We continue to improve the Company's performance despite the graphite markets
being subdued in recent months, reflecting confidence in our business
strategy. We are confident that this is the time when developing further will
provide opportunities for the future. Sailing through the current suppressed
markets with growth and addressing the subdued share of the Company are on our
priority at this time."

 

"We have been constrained by working capital limitations but  the debt
markets are getting increasingly buoyant for critical mineral development
opportunities in Africa. Our advanced stage into production and growing
financial outcomes are handy in dealing with interested institutions. As
perhaps the only Graphite Company to have had positive operating margins since
inception, and with the scale of operations now reaching the point where the
Company is expecting a strong financial, we are furthering potential debt
engagements with institutional providers."

 

"We are confident that our efforts will be recognised by the markets as we
continue our progress, and the boost in graphite demand expected to result in
a significant supply deficit in the near term will be an eye opener for
increased investment interest in this critical mineral."

 

"Our projects are globally significant and have industry leading positive
operating margins compared with our whole ex-China peer group, even at the
early stage of ramping up development and production. As our strategy makes us
apparent as a promising player in the evolving graphite ecosystem, we will
continue our endeavours in the best interest of the Company and our
shareholders."

 

"The success of the first hydro power plant is a significant step in our green
credentials. Further development of renewable energy will be a priority for us
in the forthcoming stages of development."

 
 

 

 

ENDS

For further information, please visit https://www.tirupatigraphite.co.uk/
(https://www.tirupatigraphite.co.uk/) or contact:

 

 Tirupati Graphite Plc

 Puruvi Poddar - Chief of Corporate & Business Development        admin@tirupatigraphite.co.uk (mailto:admin@tirupatigraphite.co.uk)

                                                                  +44 (0) 20 39849894
 Optiva Securities Limited (Broker)

 Ben Maitland - Corporate Finance                                 +44 (0) 20 3034 2707

 Robert Emmet - Corporate Broking                                 +44 (0) 20 3981 4173

 FTI Consulting (Financial PR)                                    +44 (0) 20 3727 1000

 Ben Brewerton / Nick Hennis / Lucy Wigney                        tirupati@fticonsulting.com

About Tirupati Graphite

 

Tirupati Graphite Plc is a specialist graphite producer and a supplier of
critical minerals for a decarbonised economy and the energy transition. The
Company places a special emphasis on green applications, including renewable
energy, e-mobility, energy storage, and thermal management, and is committed
to ensuring its operations are Sustainable.

 

The Company's operations include primary mining and processing in Madagascar,
where the Company operates two key projects, Sahamamy and Vatomina with a
combined 30,000 tpa currently installed capacity, producing  high-quality
flake graphite concentrate with up to 97% purity  and selling to customers
globally.

 

The Company has also acquired two advanced stage, and world class, natural
Graphite projects in Mozambique, and has commenced work to optimise the
economics for development of the construction initiated Montepuez project,
which is permitted for 100,000tpa.

 

 

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